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This week, the House Appropriations Committee approved the FY ’15 Financial Services and General Government (FSGG) Appropriations bill. The Committee's bill includes $230 million for the CDFI Fund – an increase of $4 million over current year funding and $5.1 million over the President’s budget request. As the chart below shows, the House bill sets aside $177 million for the Fund’s Financial Assistance (FA) and Technical Assistance (TA) grant programs, and those set-asides are provided in bill language. In addition, $15 million is set aside for the Native American CDFI Initiative, $18 million for the Bank Enterprise Awards (BEA) program, and $20 million for CDFI Fund administrative expenses. The House Appropriations Committee did not include funds for the Healthy Food Financing Initiative (HFFI) or authority for the CDFI Bond Program, as requested by the President.
This past Tuesday, June 24th, the Senate Financial Services and General Government (FSGG) Appropriations Subcommittee approved its FY '15 spending bill. While the bill has not been released to the public, Senator Udall (D-NM), who Chairs the Subcommittee, spoke during the mark-up about his commitment to "target resources to boost job creation and community development," including $230 million for the CDFI Fund in the spending bill, along with $1 billion in CDFI Fund Bond authority. A press release issued by the Appropriations Committee reported some--but not all--of the CDFI Fund set-asides, including $1 million to promote CDFI expansion into underserved areas, $35 million for HFFI, and $18 million for BEA. Additional information on the Senate's FSGG Appropriations ...

Washington DC, June 25, 2014
Transform Finance Investor Network Launches With Pledge of $556 million “Transformative” Investments at White House Event
A group of leading private sector investors, at a high‐level roundtable on impact investing convened by the White House, has pledged $556 million to a range of social investments using a novel investment approach centered on social justice and community value creation.
On June 25, 2014, the White House hosted a round table on impact investing, during which some 20 new private sector commitments were made to drive more than $1.5 billion into investments that intentionally generate measurable social or environmental impact as well as financial return.
The group of investors convened by the Transform Finance Investor Network, concerned about a trend in impact investing that stops short of truly transformative impact, pledged to invest in alignment with the transformative finance principles of:
(1) engaging communities in the design, governance, and ownership of projects (2) creating more value for c ommunities than is extracted by investors (3) fairly allocating risks and rewards between investors, entrepreneurs, and communities
The group of Transform Finance Investor Network investors includes Pi Investments, Blue Haven Initiative, New Belgium Family Foundation, ReInventure Capital, and The Working World. These members will invest across asset classes, geographies, and verticals.
“This is a novel approach that puts capital at the service of community needs. We hope that through our participation in the Transform Finance Investor Network, we can help build a vibrant community of sophisticated investors who deeply believe in empowerment and intend to consider and prioritize community benefit in every investment we make,” said Brendan Martin, President of The ...

Representatives and guests from the U.S. National Advisory Board to the Global Task Force on Social Impact Investment rang the Closing Bell at the New York Stock Exchange (NYSE) today to raise awareness about the role of public and private innovation and entrepreneurship in solving our greatest social and environmental challenges.
“Our society faces challenges that cannot be solved by government and philanthropy alone, spurring innovative approaches that harness the efficiency and discipline of markets. Impact investments deploy private capital for public good and are intentionally designed to deliver social or environmental benefits as well as financial return,” said Tracy Palandjian, CEO of Social Finance U.S. and co-chair of the National Advisory Board. Matt Bannick, Managing Partner of Omidyar Network, co-chairs the National Advisory Board with Palandjian.
For more information, visit www.mysocialgoodnews.com

CDVCA member fund Bridges Venture has successfully completed final close of the Bridges Sustainable Growth Fund III. The fund closed at £125M, surpassing its original target of £100m, and is two-thirds larger than their second £75m fund raised in 2007. The fund will continue Bridges Ventures’ focus on the provision of growth capital to small businesses, while seeking both commercial returns and positive social impact.
Through its new fund, Bridges seeks to build on its extensive track record of investment - the firm recently won "Venture Exit of the Year" in the prestigious British Private Equity Awards 2013 for its partial divestment of The Gym Group. The successful fundraise also speaks to growing interest among investors in sustainable and impact investment. New investors in the fund include the European Investment Fund and the London Pensions Fund Authority.
For more information, visit www.bridgesventures.com.

CDVCA serves as the General Partner for New York Stateâ€™s â€œInnovate NY Fund, L.P.,â€ an economic development Fund of Funds, consisting of limited partnership investments into eight New York State-focused, early-stage venture funds.Â Â The $45 million fund is a seed stage business equity fund to support innovation, job creation, and high growth entrepreneurshipÂ throughout the state. The Innovate NY Fund is supported with $35 million in State funds (allocated from the US Treasuryâ€™s SSBCI Program) and $10 million from Goldman Sachs Urban Investment Group, and will leverage up to $450 million in additional private investment.
The purpose of the Innovate NY Fund is to promote technology-led economic growth in the state through targeted investments by regional venture fund managers (the â€œSeed Fundsâ€) into over 100 seed and early stage companies; and to encourage additional private sector investment across the state.Â Unique among state-funded venture capital programs, Innovate NY Fund recognizes that effective statewide growth must include its lower income populations.Â The Fundâ€™s investment criteria include a requirement to invest a portion of proceeds in businesses located in lower income communities, or to meaningfully employ individuals from these communities.
New Yorkâ€™s approach has been to collaborate with private investors, which includes Goldman Sachs as a limited partner, and through an effective matching investment requirement for the participating funds.Â As part of the Small Business Jobs Act signed into law in September 2010, the State Small Business Credit Initiative (SSBCI) was created under the US Department of the Treasury to provide direct support to states ...

The Gym - A UK Dynamo
CDVCA Member Fund Bridges Ventures sold its majority stakeÂ in The Gym, a milestone deal for Bridges and its fourth successful realization in just over 12 months, following the exits of The Hoxton (9x multiple), Pure Washrooms (3.4x) and Whelan Refining (4.7x). The Gym - incubated by Bridges from concept stage and now operating from 37 sites across the UK - is a prime example of how strong commercial results and excellent social impact can go hand-in-hand. The sale generated a 50% IRR and 3.7x multiple for investors in Bridges funds, of which a minority was rolled over to retain a 25% stake in The Gym going forward, enabling Bridges investors to benefit from the future growth in the business.
The Vet - Low Cost Veterinary Clinics
Bridges portfolio company The Vet, a low-cost, high quality veterinary services business, has opened the doors of its first clinic in Hengrove, Bristol. With the cost of veterinary services and pet insurance on the increase, The Vet hopes to fill a gap in the market for better, more flexible and fairly-priced veterinary services. Bridges incubated the business and provided funding and working capital through the Bridges Sustainable Growth Fund III and there are plans to roll-out the model to other sites across the UK, mainly located in underserved areas.
G8 Social Impact Investing Forum
Bridges was honored to be part of the G8 Social Impact Investment Forum, hosted by the Cabinet Office on 6th June. The event gave Bridges the opportunity ...

Earlier this month, Senators Max Baucus (D-MT) and Orrin Hatch (R-UT), the Chairman and Ranking Member of the Senate Finance Committee, wrote to their Senate colleagues asking for comments and feedback on tax reform. In the letter, Senators Baucus and Hatch describe the â€œblank slateâ€ approach they will take in reforming the tax code and the only provisions, credits, or deductions that will be continued after tax reform are those that meet: "(1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives."
Senators have been asked to submit their comments or recommendation letters to the Finance Committee by Friday, July 26th and the submissions will not be made public by the Finance Committee.
It is important that Senators hear from CDFI about the tax provisions that are critical to the community development and economic revitalization efforts in their home states â€“ particularly the impact of the New Markets Tax Credit, the Low Income Housing Tax Credit, and the Historic Tax Credit.
In an effort to encourage Senators to comment on the these tax provisions that help fuel the work of CDFI â€“ the Coalition has drafted language on the New Markets Tax Credit, the Low Income Housing Tax Credit, and the Historic Tax Credit that CDFIs can encourage their Senator(s) to include or reference in comments they submit to the Finance Committee.
Suggested Language for Senators Drafting Tax Reform Comment Letters:
NEW MARKETS TAX CREDIT
The New Markets Tax Credit (NMTC) is ...

The CDFI Coalition sent a letter to the CDFI Fund regarding the certification/recertification process on March 21, 2013. The Coalition requested that the CDFI Fund take steps to ensure that no CDFI was de-certified without notice of potential deficiencies in their recertification applications and an opportunity to cure deficiencies. As stated in our letter, which can be found here, there could be serious and potentially irreparable harm in de-certifying a group, such as putting the group in default of Financial Assistance, Technical Assistance or New Markets award agreements, or in default of other agreements that require the entity to be a certified CDFI.
In response to the Coalitionâ€™s concerns, the Fund published a Frequently Asked Questions document yesterday. The key element of that document is the Fundâ€™s commitment to contact any applicant for recertification at least once during the review process if there are documents or materials that are deemed necessary to complete the review. The Fund has set a 90- day timeframe for the 2013 recertification process - during such time a CDFI could cure whatever the deficiency might be. However, the Fund has indicated that, in its discretion, it may not allow a cure period for certain deficiencies, such as inability to demonstrate legal status at time of application; inability to demonstrate primary mission of community development, and/or evidence of government affiliation or control.
The recertification timeframe could have a negative effect on individual CDFIs with pending Financial or Technical Assistance applications in the FY 2013 funding round. ...

SJF Ventures conducted the final closing on itsÂ third fund with more than $90MM in capital commitments, tripling the size of the previousÂ $28MM second fund. The target for SJF Ventures III was $75MM and the fund was substantiallyÂ oversubscribed at its final April closing. â€œWe are honored that so many investors choose to join our partnership,â€ said David Kirkpatrick, SJF Managing Director and Coâ€Founder. â€œWe areÂ particularly excited that a wide variety of bank, insurance, foundation, family office, pension,Â mutual fund, and individual investors have recognized that SJFâ€™s impact investing strategy canÂ yield above market financial and mission results.â€ SJFâ€™s current, second fund is performing inÂ the top quartile all US venture capital funds of its vintage year.
SJF Ventures invests in high growth, positive impact companies seeking expansion capital roundsÂ of $1MM to $10MM. SJF has invested in 36 portfolio companies over the last decade. â€œWeÂ realize SJFâ€™s success is due to the exceptional results achieved by our portfolio companies such asÂ Aseptia, BioSurplus, CleanScapes, Community Energy, eRecyclingCorps, Fieldview, Optoro,Â MediaMath, MedPage Today, and ServiceChannel,â€ said David Griest, SJF Managing Director.Â â€œWe are eager to find the next set of great entrepreneurs for our third fund.â€
SJF Third Fund Press Release

Social Impact Bonds (Pay for Success) offer an attractive alternative to the status quo of paying for programs instead of results. Despite our best efforts, the poverty rate today is roughly what it was when the War on Poverty began in 1964.Â We are winning important battles but losing the war. A new social policy paradigm is needed. Pay for Success financing has the potential to improve the social sectorâ€™s effectiveness by rewarding programs that work, encouraging innovation, validating progress, and attracting private capital to the anti-poverty cause. As George Overholser and Caroline Whistler write in the latest issue of The Community Development Investment Review, it would â€œredirect and refocus our abundant resources, relentlessly, toward the innovations that demonstrate an ever-improving ability to deliver the results our communities need.â€ Certainly, important questions remain about Pay for Success. Equally important, however, is can we afford to pay for anything less?
For full content:Â http://www.frbsf.org/publications/community/review/vol9_issue1/index.html